Peanut Acreage Will Be Cut In Half

But this year, that generations-long era of planting peanuts has come to an end for the Isle of Wight County farmer.

"This will be the first year in the farm's history that we haven't had any peanuts," said Oliver. "Even during the lean years, when we weren't making money and the government was cutting back acreage, we always planted peanuts.

"But the prices are just terrible this year. Peanuts are very labor intensive ... and I just can't justify all the work when we're not making any money."

Historically, peanuts were one of those things southeastern Virginia farmers counted on, sort of like rain and sunshine. But with the surplus of peanuts left from a bumper crop last year and plunging demand after a nationwide salmonella scare earlier this year, growers across the region are giving up their goobers.

Farmers in Virginia will sow about 12,000 acres of peanuts this spring, about half of what they planted last year, according to the Virginia Department of Agriculture and Consumer Services.

"I think that's an optimistic figure," said Dell Cotton, executive director of the Virginia Peanut Growers Association. "I think we'll be doing good to have 10,000 acres of peanuts in Virginia this year."

The state's peanut acreage hasn't returned to the level it was early in the decade. For example, in 2004, Virginia growers harvested 32,000 acres that produced 104 million pounds of peanuts. That fell to 16,000 acres in 2006, largely because of a surge in peanut production in Georgia and Alabama that year, Cotton said.

But until now, peanuts had been experiencing a gradual comeback, with a harvest that climbed to 24,000 acres in 2008.

The stagnant market has made shellers slow to produce contracts for farmers this year - and the ones that have are offering growers significantly less money than they were a year ago, said Cotton. Last year, farmers received about $600 per ton for peanuts; this year, the shellers' offers have come in around $450 per ton.

"The farmers are reacting to the oversupply," Cotton said. "In these difficult economic times, it's hard to be asked to do something for 20 percent less than they did a year ago."

The salmonella outbreak that swept the country this year, which was ultimately traced back to Georgia and Texas processing plants owned by the Lynchburg-based Peanut Corp. of America, has less to do with the acreage cuts than one might believe, Cotton said. Although the outbreak did prompt massive reductions in peanut butter consumption in January and February, national sales figures for peanut butter were up last month.

It all boils down to economics, said Billy Gwaltney, a Windsor peanut farmer who is planting 350 acres this year.

"We had an oversupply of peanuts long before the salmonella came along," he said. "We've got to get supply and demand back in kilter.

"I think we can work through this thing this year and be able to come back in 2010 with decent, respectable prices."

An anticipated growth in the export of peanuts to Europe, coupled with declining peanut acreage in China, will help the U.S. peanut industry get back on track, Gwaltney added.

BY THE NUMBERS

Peanuts have had their economic ups and downs in Virginia in recent years. Here's a snapshot of the last five:

* 2003: Virginia produced 95.7 million pounds of peanuts, with a cash value of $21.6 million